Danone (BN.PA) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Market Share Movements
David Hayes – Nomura: Two questions from me. Just firstly on market share, just wondering whether in two key markets you can give us any kind of indication on market share movements. So those markets being the U.S., obviously, you mentioned Greek continuing to do well, particularly February-March. Just wonder whether you can talk about the share progression in that category in the U.S., and then also in Spain, obviously, Portugal you highlighted is doing better but whether there’s an indication to show either other volume or value wise from the market share progression in Spain in the first quarter. Then the second area was just on the Spain minorities; obviously, in the release you talk about – as I understand, I am just trying to clarify this 14% of the minorities which I think have moved to jurisdiction to resolve what feels like what levels that they get paid as they are selling those interest. I just wondered whether that is the right situation and then related to that, you talk about a buyback of EUR200 million to EUR300 million in consideration in the next couple or few weeks, I just wondered whether that’s related to the outcome of that jurisdiction or whether that’s a separate buyback plan?
Pierre-Andre Terisse – CFO: So that’s a comprehensive set of questions, one by one. On the market share first, in the U.S., we continue progressing. So in fact the category, the Greek segment has kept increasing — we showed I believe on the last – on the full year deck, we showed share of Greek which was close to 40%, we now exceeded that level and we keep overall gain in share in the Greek segment with Oikos and more importantly with the addition of Light & Fit. So, we keep progressing in terms of market share in the U.S. In Spain and that will be comment true for other countries of Europe as well. Interestingly, we have stabilized our market share sequentially versus Q4, so that’s not yet the place where we would like to be – in fact, we would like to find back positive dynamics, but the fact that we are stabilized our market share sequentially is I think an interesting signal and again that’s true for Spain but for some of the markets as well. As I said, it will take more than few more weeks or month to get to a (indiscernible) but this indication in particular is reassuring. Spain and minorities, well, no – I mean, we just felt as we’ve been communicating regularly on this topic that it was fair to indicate or to give you an update on that basically. While we had found some ground for agreements with some minorities in 2012 and in the very first part of 2013, we have not found such ground for agreement with other minorities. Therefore, we decided to follow the normal process, which is to go to third parties to help us resolve our difference. No – I mean, nothing exception to that. We just – it’s normal life, and we’ll go until the end of this process, which we’ll keep you updated on in terms of progress as we move into the year. There is absolutely no link whatsoever. I’m sure if we had given this impression between what I just said in terms of Spanish process and the buyback. In fact, it’s in the same section because we have been doing buyback on the back of transaction – previous transaction with minority shareholders, but the EUR100 million to EUR200 million which I mentioned are basically normal buyback which we continue as the cash flow of the Group remained strong and as we are gaining visibility on that item as we move into the year. So, no relationship whatsoever with the Spanish minorities.
David Hayes – Nomura: Just quickly follow-up on the Spain comment. That’s a value share where you stabilize, is that right, rather than volume, is that correct?
Antoine Guttinger – IR: That’s value.
Eileen Khoo – Morgan Stanley: I have a few questions. The first one is on Western Europe dairy, could you update us on the particular markets where you have changed promotional activity and/or pricing? What does this imply for the price gaps in those markets?
Antoine Guttinger – IR: You are talking too close to the mic. You should…
Eileen Khoo – Morgan Stanley: Is that better? Sorry. So my first question was on dairy Western Europe. I was wondering if you could update us on the particular markets where you have changed your promotional activity or/and pricing? What this has implied for the price gaps in those markets? The second question is on baby food. Could you give us a bit more color on the Chinese market in particular and any impact from the new rationing law and your decision to ration sales in some part of Europe? Do you think that this could be perhaps a very early sign of the category reaching a level of greater price elasticity, particularly given the huge price differences versus the other markets? Also, what sort of run rate would you expect for the full year versus the 14% I think underlying the first quarter?
Pierre-Andre Terisse – CFO: You’re welcome. So a few several points; Western Europe first. I think I mentioned repeatedly over the past few quarters then promo pricings is a tool, which we want to use very selectively because we basically want to use it whenever we feel it can create value. We feel it can create value mostly around price points. This is one you’ve not seen significant negative pricing over the past few quarters and this is why you are not seeing that either today. If you take the overall dairy, you see a price/mix, which remains positive (validate) at 0.2%, which is lower than Q4, but it remains positive. This being said, in the markets all products where we have been using that we’ve had basically positive results in terms of volume improvements, but very much in line what we expected, i.e., sufficiently positive to more than offset the pricing, but not by a very large amount. So it’s really more something which we use as a part of our efforts to reshuffle the portfolio and bring value to the consumer and not so much something, which we are using as we may have – as we have done in the past at some stage during the recent exercise back in 2008 to have a significant effect on our sales. From that standpoint, the Portugal example is interesting, because it again shows and that’s something, which we have already seen somehow in 2008, that’s the real improvement come from the fact – sorry, it comes when you combine new product introduction, product renovation, some adjustments in value which come both from price, promo and mix with the addition of the Ecolean and revamping improvement of the recipes and facts. I’ll remind you that we have as well – at the same time as (in the rest) in Portugal we are introducing the KISS Cup, new cup as well as improving some of our recipes. So again, it’s frankly too early to draw conclusions for the rest of the portfolio and I repeat, the comps will make it difficult to see any noticeable improvement on the dairy in Europe before the second half, but these signs confirm us in the direction which we have taken, which is to go in several directions in Europe, pricing, promo but also the improvement of the product, innovation, renovation and so on to rebuild a top line, which we want to bring back to low negatives and then progressively to low positives going forward. On the Baby Chinese, I think what we are seeing today can justify a lot of reasoning, extrapolation, speculation, I mean all the likes; and we stay extremely therefore focused on looking at the fundamentals. To me the fundamentals is that this market, which has been extremely strong in terms of value growth for the past three to four years now, keeps being extremely strong in terms of value growth and perhaps even stronger. So the most important to me and to us is the demand is there. There is not only no sign of weakening of the demand, but on the contrary, we see sign of strengthening of the demand to the point that there is no sufficient offer available in this market to be able to meet this demand and hence all the (phenomenons) which you have been reading in the press and observing in the press, you were – in the best you were days and weeks. In front of that, our priority has been and remains to segment our portfolio and the portfolio we are referring to the Chinese consumer, and in particular to get stronger in the areas in which we are not sufficiently strong. So today when you look at the portfolio of Danone in China, we have Dumex, we have Dumex Gold, I think we are strong in the mainstream, we are strong in super premium. We probably will – we were missing or we are the (indiscernible) of Dumex which was probably not sufficiently high in value and this is why we innovated that a year ago. We have been, as you have seen, strengthening our specialty offer this quarter. We will take other initiative in the coming months and quarters to keep strengthening our portfolio. I believe this is the only reasonable, wise and sustainable answer for addressing a market which has and will keep having strong dynamics for the years to come fundamentally. So I don’t know if it answers your question, but that’s very much the way we look at the Chinese market and this is what makes us confident that our position and our performance will remain strong going forward. Now looking at the specific and last elements of your question, which is the run rate, it’s – so I said that already, there is an element of comps which has helped in Q1 and which for sure is not going to be a help in Q2, and that’s the positioning of the Chinese New Year. There’s a second element of comps which is going to be unhelpful in Q2 and that’s the fact that we made a full relaunch of Dumex Gold a year ago and you remember that we flagged that this was helping and boosting the performance somehow, so we’ll have the reverse of that in Q2. Then the rest is going to be basically depending on the demand from China. Frankly, I see no reason why it should materially decline going forward, at least in the coming quarters.